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I am sure you have heard the phrase before, “being comfortable with the uncomfortable”.  I know a good amount of people that have started their own business and have read a lot of the articles out there about starting your own business.  Generally, entrepreneurs fall into two categories; planners and seat of the pants type of people.

I am the latter, I planned everything to the nth degree.  Here is the thing about starting your own business….no matter how much planning you do, things will go off the rails quick!  This is one of the reasons 8 out of 10 entrepreneurs fail or quit within 18 months of opening their venture (according to Bloomberg).   This is a shockingly scary statistic.

Science shows us that when people are put in uncomfortable situations, they look to escape, and often as quickly as possible.  Think about the last time you were in a situation that you didn’t like.  My guess is you might not have dug in and seen the situation through.  Most times we don’t.  Most of us look to “cut bait” and get out. A dash back towards safety.

The thing about being a business owner is there are more uncomfortable situations than not.  For most of us, it’s the first time we have opened and operated a business.  Just like most things you do for the first time, there will be situations you have never experienced before.  A lot of them.  Most take them in stride to begin but after a while, it begins to become overwhelming.  This is where the proverbial fork in the rode is.  Do you make a U-turn and head back to a comfortable place, or do you keep forging ahead?

I wish I could tell you to “keep going, things will get better”.  Fact is, they might, and hopefully will.  The first 18 months are filled with unique challenges that once conquered will lead to growth down the road.  Statistics also show us that if a business survives the first 18 months, their chances of long-term success increase exponentially.  But everyone has their limit.  These challenges will affect your family, relationships, and life in general.   We all have our limits and odds are you will get pushed close to yours.

So why would anyone do this?  My dad says, and I often remind myself, “if it was easy, everyone would do it”.  Most have heard that statement before, but really sit and think about it.  Most people don’t want to be uncomfortable.   The thing with being uncomfortable is it often is the feeling before personal growth.  You will learn how to figure out the situation you are in.  Personal growth often leads to success.  Most people don’t fall into success, they must strive for it.

Everyone must make their own decisions and I have my days where I am tired of feeling uncomfortable.  You’ll have your days too. But remember the ultimate goal of personal growth and success.  It is almost impossible to achieve those without first being uncomfortable.

Just a quick post today…….

Yesterday I found a great article from earlier in July that Chris Myers from Forbes wrote.  He takes a very practical and down to earth approach on how to review a Franchise Disclosure Document.

When we talk with potential franchisees and mention the Franchise Disclosure Document, for many it is the first time they have heard of such thing (we refer to it as the “FDD”).  Every franchise is different, but generally, if you are looking into a franchise system you will get this fairly early on in the process.  For most, this is the time when things start to get “real”.  For the first time, they are seeing hard numbers of what it costs to open a business and there is a lot of detail on what it will take to run the business.

Overall, the document is written by lawyers.  If you have ever read a document produced by lawyers, then you know what this means.  If you don’t, then go read your mortgage and you’ll know exactly what I am getting at.  Legal writing at times can look like literature from 17th century England.

However, this doesn’t make the FDD any less important.  I can tell people get overwhelmed by the document because this is where we lose more people in our process than any other step.  Out of the people that we do connect with after the FDD, I can tell about half didn’t read through the document.

What Chris does in the attached article below is going section by section and detail what is in it and how it should be read.  While the document is typically only 40-50 pages long (not including the exhibits which push it well over 125 pages), I have often thought a guide to review it would be extremely helpful.  Chris does exactly that.  Whether with Monkey Bizness or another franchise, use the tool below to help with your due diligence.

https://www.forbes.com/sites/chrismyers/2018/07/08/how-to-read-a-franchise-disclosure-document/#2ecdc24533da

I was driving back home on December 9, 2015, after just signing the paperwork and writing the check to purchase Monkey Bizness.  I had quit my job in October to fully pursue closing this deal.  For more than 2 months I had sat at my home office and planned and schemed all the things I would do once I was finally in control.

The next morning, I met with Ashly Myers (our current Director of Marketing) who was informed just the previous day that she would have a new employer.  I met with Ashley at a Starbucks and we had instant chemistry.  She has been a trusted confidant since that time.

After that meeting, I met the previous owner at our Centennial location to introduce myself to the employees.  I sat and talked with each of them along with discussing some operational things with the previous owner.

It was a whirlwind of 20 hours where I went from excited, to nervous, to excited, to overwhelmed, and finally to scared.  In all the time I had over those first few months, I rarely contemplated the question of “what if this doesn’t work?”.  Being a CPA by trade, I had contemplated the question from a financial perspective, but never from an ego or sense of pride perspective.

I have been around many small business owners throughout my career.  I had actually admired the lifestyle of watching some of them being fully involved with their businesses, day, night, no matter what.  They were so committed to the success and you could see the passion they had when they discussed their business.  Many of us know people like that.  I think we all admire them to a certain degree.

What you don’t see is the pressure and concerns they deal with on a personal level.  They often keep those bottled up and discuss them only with their closest one or two confidants.  To everyone else, they give off an image of confidence and passion.  This is not fake, its’ real. However, the feelings of being overwhelmed or concerned they don’t want to project to anyone else.  But these feelings do exist.

I worked at a software development firm for 2 years prior to owning Monkey Bizness. I was the highest financial employee in the company.  The owner of the company strongly believed in what they were doing and had a great passion for it.  He had built the company over many years and was at a point where he wanted to “go for it”.  I watched him over those 2 years build a financial, sales, and marketing team.  He doubled the size of his operations/development team.  When I would talk with investors with him he would give off an image of confidence and passion.  However, when it was just me and him or his executive team, you could see the worry he had.  He fully understood the risk and while it didn’t paralyze him, it certainly weighed on him.

One couldn’t fully understand the emotions he was going through unless they were in a similar position.  Now as a business owner, I am passionate and confident in my business.  However, I still have feelings of being overwhelmed or worried if something we are trying will work.  I keep those feelings to myself mostly and discuss them with only a few individuals.

I write this to tell you that you too will have these feelings if you take on owning your own business.  Most business books don’t tell you about this and so many are surprised when they get into their venture.

Whether it is Monkey Bizness or another venture, know that you have a support system around you.  They may not understand exactly what you are going through, but know that everyone else that has walked this path has gone through the exact same.

Everyone Needs Someone to Talk With

A few weeks ago I was asked to speak to a group of business owners about my experience of owning Monkey Bizness.  The group was a leads group so it was mostly full of consulting types that were either sole proprietors or might have 1-2 employees.  I was invited to the group by a former marketing consultant that we had used.

I told my story about the journey from being a CPA to now owning Monkey Bizness.  After the story, I took several questions from the group.  One question I was asked was to describe the value that I got out of my relationship with the marketing consultant that had invited me.  I think my answer somewhat surprised the group.

At the time we had used this particular consultant, I did not have a management infrastructure built in Monkey Bizness.  This consultant, on the other hand, had been at an executive level within the marketing profession for a number of years.  While her marketing experience and ideas were great, what I valued most was having someone at the same level as me that I could discuss business ideas and strategy with.  I told the group that being an entrepreneur can be lonely.  You are responsible for making a lot of high-level decisions and early on, you don’t have a lot of people to talk about those with.

One thing I always recommend to new business owners is to find a coach or a mentor.  You might have a couple, but you need at least one.  I have 2 or 3 coaches that I talk with somewhat regularly.  Regularly with one might be weekly and with another one may be quarterly. That is OK.

What do you want to look for in a good coach?  Here are my top 5 qualities I look for –

1. This person should be a good listener. It should be someone you can discuss issues you are having, big decisions you need to make, and the ideas you have to grow.  This person can help you run through different options or bring up different paths you maybe haven’t thought of.
2. This person should hold you accountable. You now have someone you will have to explain to why you didn’t get something done you previously discussed.  Having an accountability partner can be of great value to you.
3. This person should be honest. Third parties that are not financially vested in your business will often give you straight answers.  If your coach or mentor sugar coats things, then I would look for a new one.
4. To me, experience is vital when I am looking for a coach. You want someone that has walked the path you are about to walk. Anyone can give you advice.  But you want good advice.  In my experience, the best advice comes from someone who has already been down the path you have gone and can share ideas based on that experience.
5. Confidentiality is a must in a good business coach. The only way this relationship works is if you feel like you can share things with little judgment being passed and the information staying between the two of you.  You will most likely discuss sensitive issues about employees, customers, and probably even your personal life.  You must have the trust that these items will be kept confidential.

So who makes a good coach?  Where do you find this business coach?

I am lucky to have a couple good coaches.  I have a coach I talk with weekly that I used to work with.  In public accounting you rarely have a direct boss, however, this individual was the closest thing to that I had.  He knows my strengths and weaknesses.  He also has worked with business owners for 15+ years and has started his own business.  My second coach is someone I was introduced to (ironically by the marketing consultant above).  She helped build a franchise system from 1 to over 120 units.  I value her experience and candidness when we talk.  We talk much less frequent, probably quarterly, but the talks are invaluable. As my organization has grown, I now have people within that I can have a lot more of these conversations with.  However, it took me a while to get there.

My advice to you would be look at who is around you.  Do you have a neighbor that has done this same thing?  Maybe you have a former employer that you are close with?  There are professional business coaches out there that might be a good fit for you.  The key is finding a person that meets the 5 characteristics above.

It was December of 2015 and I was driving from my house to the bank to get funds to purchase Monkey Bizness Franchising and one of the stores.  The house I was leaving I had just purchased 18 months earlier.  After buying the house, 6 months later my wife and I had our 3^rd child.  My two older kids had just started at new schools in August of 2015.  And, if I am nitpicking, it was smack dab in the middle of the holiday season.

With seemingly so many life changes going on over the past 18 months, one might ask if it was really the right time to jump into owning my own business.  I hear it all the time from people we are talking with.  They are contemplating when is the right time to own their own business.  For some people, I truly believe this is a defense mechanism because deep down they don’t truly feel comfortable taking such a life change plunge.  However, for others, they really are trying to time the best time to own their own business.

I was in their shoes for many years.  While spending over 10 years in public accounting, I constantly combed the internet looking for businesses to purchase.  As I got more experienced, I would reach out to a couple a month and get the details from a business broker.  I would comb through the financials and narratives put together by the owner and broker and inevitably determine it was not the right time.  Looking back, I now understand that I was nervous about making such a life-altering decision.

Owning your own business, is just that, life-altering.  Depending on the business, the degree that it alters your life may be up for debate.  However, what is not up for debate is it will never be the right time to take a plunge into entrepreneurship.

Rather than looking for the right time, I would strongly coach people to ask themselves are they personally ready to own their own business.  This is a much different question.  Asking yourself is now the right time is to own a business, you will inevitably look at your family situation, place in your career, what is going on personally, and other questions.  Once you look at these, most likely, you will determine it is not the right time.  You will determine that starting a business will throw a wrench in all of these, and you’re right.

However, asking yourself if you are ready to own your own business is a different question.  Those questions look more like this:

1. Does owning my own business help me accomplish my long-term personal goals?
2. Have I acquired the skills necessary to be successful in owning a particular business?
3. Are the personal relationships that are important to me stable enough to withstand the stress that owning my own business will create?
4. Have I evaluated the immediate financial impact of owning a business and if my family can still keep our current living status (for the most part)?
5. Does the business and investment in the business match the level of risk I am comfortable taking?

These questions won’t help you determine if a certain business is right for your or not.

I can only give advice based on my past experiences and from observing others around me.  If you are asking yourself is now the right time in your life to start/buy a business, you will most likely answer “no”.  However, if you are asking yourself “am I ready to own my own business”, you may surprise yourself with the answer.

One of our goals has always been to support owners of locally owned businesses.  Whether that be owners of a Monkey Bizness or partnering with other local businesses in our community, we are firm believers that local business owners are vitally important to healthy communities.

The Small Business Administration estimates there are over 28 million “small” businesses in the United States that are responsible for creating 63% of the new jobs.  When you think about this on a local level, you start to realize how important local businesses are.  Without jobs in local communities, it is hard for the community to do more than just survive.

Locally owned businesses build strong communities by sustaining vibrant town centers. They are often more aware and willing to support local causes.  Locally owned businesses recycle a much larger share of their revenue back into the community, therefore enriching the community as a whole. They are a big driver in moving families out of low wage jobs into the middle class or higher.

I look at a community that we just entered into, Sioux Falls, SD.  Sioux Falls is a great local community and one with a strong group of locally owned small businesses.  The community is constantly ranked highly in any survey that names the best places for families to live.  This is not a fluke…Sioux Falls is a proud community where local business owners and leaders have led the way to create a vibrant job scene.  As a result, the community is remarkably resilient in times of economic downturn.

Monkey Bizness is lucky to have a great group of owners.  One such owner has a special level of dedication to their community. They have used Monkey Bizness as a launching pad to not only provide a safe and fun family place within their community, but they use it to help other like-minded organizations in their community.  They work hand in hand with other local business owners to create a better community. They work closely with local non-profit organizations on toy, food, and school supply drives.  They have a reading program with local schools to reward children for reading.  This past year, the owner started their on 503(c) organization to further their charitable mission.  They also mentor other local business owners in their community who are just starting out. On top of this, they employ 9 people in the community.  We could not be prouder to have owners like this in our system.

We believe we have a solution to help aspiring entrepreneurs who want to be an influential leader in their community.  We talk with many people who have dreams to have a family owned business that is active in their community.  We look to provide the systems and support to help them accomplish their goals even if they may not have the background or experience at first.

To learn more about Monkey Bizness, reach out to us.  We are looking for 1-2 franchisees a year that are aligned with our goals and mission.

We have been open for nearly a month at our new location in Sioux Falls, South Dakota.  The community has been great and we have met lots of wonderful new Monkey Bizness customers along the way.  Businesses like Monkey Bizness are always fun to introduce to new communities.  The reaction and reception we get always makes us feel welcome and Sioux Falls has been a great community to be a part of.

By no means is the work done.  We are currently executing a 6-month marketing plan and continue to train our employees among other things.  We started this journey last August when we toured various facilities and have now completed the lease negotiations, build out, installation of equipment, and grand opening.  As such, we took a minute to reflect on some of the successes and some of what we would do differently as we move on.

As we have previously discussed in this blog, our Sioux Falls store was the first or our new concept.  We shrunk Monkey Bizness down to less than 3,000 square feet (2,950 to be exact) and tried to create more of a jungle-like atmosphere inside.  While we love the design, we are the first to admit we miss having a party room.  While there is some aspect of 3,000 square feet that are difficult, the overall design has given us confidence that it was the right first step.  As we look to build our next center, we know that not only will 3,000 square feet work, but 4,000-4,500 square feet is ideal.

This is a huge discovery for us and our future owners!  Many of our centers today are around 7,500 square feet.  By shaving off 3,000 square feet we save many of our owner’s thousands of dollars each year in rent, utilities, and other costs.  By caring more about our owner’s bottom line then their top line, we believe we can help create better businesses.

By opening a new store, we have also put our marketing team to the test.  I can say that I have been delighted with both their execution of their plan and also their willingness to learn.  The buzz that was generated throughout the community and on social media as a result of a plan put in place months ago was fun to see.  No, as we embark on executing the second phase of our marketing plan over the next 6 months to build awareness in the community, we are listening to customers to see how we can better reach them.

All of this is part of starting a new business.  As an owner, you go through the stages of reckless optimism, confusion, fear, and then eventually to a feeling of accomplishment and pride.  Starting a business is hard work, however, I am proud of the team we had and the plan they executed to get us where we are today.  We can’t wait to help the next person realize their dream of owning their own business.

Many small business owners struggle to determine what metrics really give them an indication of whether their business is achieving its’ objectives.  Quite frankly, discussions around key performance indicators (KPIs) can be pretty scary for people who are not financially inclined.

At Monkey Bizness, I consider KPIs the brains behind what we do.  I like to tell people, “we aren’t just a pretty face”.  The biggest issue for small business owners is either identifying too many KPIs or not being able to match KPIs properly with business objectives.  Below is a quick discussion about four KPIs we use and why they are important to Monkey Bizness.

Average Visits per Year per Customer

This one gets a little wordy but is really pretty simple.  How many times a year on average do our customers visit?  If the metric is 2, then on average, a customer visits us twice a year.  Based on a number of different studies, it is much more expensive to gain a new customer rather than build value in a current customer.  This KPI is telling us how well our marketing and other programs are doing in generating repeat business.  When we generate more repeat business, we generate more revenue, which is a business objective.

Revenue per Square Foot

This is a pretty popular metric used in the retail industry, and while Monkey Bizness is not the typical retail concept, we do believe this is important.  Essentially this metric tells us how efficient our stores are in generating revenue.  We sell ice cream snacks from a popular vendor in our stores.  The cooler for this snack takes up approximately 5 square feet and generates $4,000 per year in revenue.   This product generated $800 of revenue per square foot (we should just fill our store with these!).  When you start looking at how to organize your store to generate the most revenue, as an owner, you start to think differently.

Labor Cost as a Percentage of Revenue

Labor is usually the biggest cost on our income statement.  When we are inefficient with our scheduling or hire labor at too high of a cost, this percentage will increase.   Some of our labor is required (we need someone to open the store and service customers) and therefore is fixed.  However, another portion of our labor is variable and can be controlled.  For instance, how many hosts do we need to hold a birthday party?  Are we training our employees well enough so they can handle the party on their own with a high level of service?  Labor is a cost that must be controlled in order to have a profitable business. Therefore, this metric helps us achieve a higher net income.

Café Revenue per $1 of Open Play Revenue

This is a quick metric that tells us how well our food sales are doing.  For instance, if we at selling $0.40 in our café for every $1.00 of open play, we know that for every child in our store, we are generally selling a high dollar cup of mocha.  This helps us gauge many things in our café include inventory on hand, product mix, and marketing.  While not as important as the first three, it does help us calibrate our product mix in our cafes so they can achieve maximum profitability.

While picking the right KPIs is important, it is also important to be able to benchmark them.  At Monkey Bizness, we can benchmark stores against each other and have some industry data to help us.  If you don’t have the right benchmarks to compare your data to, it can often be hard to know what it means.

If you would like to learn more about franchising with Monkey Bizness, please reach out to us.  We love talking to inspiring entrepreneurs so even if you are on the edge about whether Monkey Bizness is right for you, contact us!

Monkey Bizness has always been that cool uncle, that has crazy hair that you always have fun with.  Well, we still want our customers to have fun, but this crazy uncle is going to comb his hair and maybe get a new buttoned up shirt…..

We are proud to announce that Monkey Bizness is taking the best of our old model and fitting it into a much smaller space.  While this one sentence is simple, the thought and work that has gone into it has been extensive.  The current Monkey Bizness facilities are between 7,500 and 12,000 square feet.  As one can imagine, this takes a huge sum of capital upfront to build and every month, a large rent payment is due.  This is not unique in our industry….I look around and see most of our competitors in similar (and sometimes bigger) spaces.  During these two years, I have also observed many of our competitors shrinking.  Many independent stores have also come and gone.  This is not unique to the past 2 years, it started prior to me taking over Monkey Bizness.  This is counter-intuitive as experiential based retail has thrived and is projected to continue to grow.  The question then must be“why?”

Being in my unique position, I get the chance to talk with former owners, see financial statements, and of course have access to information in my own franchise system.  Having a financial background, I also have the ability to further dive into financial statements and play around with financial models.  So, what is the takeaway?

The cold hard truth is that most in our industry spend far too much opening a store and then struggle to keep up with the ongoing expenses.  One former owner I talked with said while the business had a small profit most months, the return on investment was so low they would never do it again.  The problem is twofold – first, the capital required to open is too significant and second, the ongoing expenses of maintaining such a large facility suck up owner profits.  Mind you this is not universal, however, if you aren’t in the middle of Denver or Dallas, it can be tough.  It’s not just rent that gets you long-term, its utilities, maintenance, and cost of changing out multiple pieces of equipment to fill the space.  As they say in the commercials, “there’s got to be a better way!”

We started tearing apart the Monkey Bizness model, asking why we did certain things and challenging industry norms.  We started asking ourselves what pieces of our business were providing the most value to our customers and identifying areas there was waste.  While doing this, we had three primary goals:

1. Reduce the cost to open a Monkey Bizness
2. Reduce the cost to operate a Monkey Bizness
3. Maintain a special and unique child and parent experience

I am happy to announce what we came up with!  Monkey Bizness is shrinking – we are now offering two different models at 3,000 and 5,000 square feet.  We have worked with our vendors, architects, and designers to create a unique experience that we believe kids and parents will love.  We stayed true to our mission of active play and creating a place for happy and healthy families.  We did this, while value engineering our entire model.

Gone is the extravagant coffee bar….while some of our guests and owners love this, if we are honest with ourselves, the revenue per square foot never supported it.  Gone are party rooms that sit empty during the week and a café that sits empty during the weekend (while you pay $20/square foot).  We have eliminated dead space on our play floor and worked with vendors to come up with a unique mix of equipment that utilizes all of the space as well as creates a fun environment for all.

Through this, we have learned more about the specific real estate that makes our owner’s successful and now have a diligent and disciplined approach to helping our owners find the right building for them.  We have built a marketing platform that our owners can tap into that we are just now learning its’ full power.  We have also identified what many people in our industry call our “zee”, or the person we believe will be most successful running their Monkey Bizness.

It is an exciting time to be a part of Monkey Bizness!  We believe that the model we have put together is truly unique. We invite you to learn more about us by contacting us at this link.